Dan Munro ’79 talks ‘Casino Healthcare’
January 22, 2018

In an episode of 60 Minutes, Steve Kroft interviewed author Michael Lewis who said, “If it wasn’t complicated, it wouldn’t be allowed to happen. The complexity disguises what’s happening. If it’s so complicated that you can’t understand it, then you can’t question it.” That quote became the inspiration behind Casino Healthcare, a book written by University of Redlands alumnus and Forbes contributor Dan Munro ’79. Munro talked with Katie Olson of U of R’s Bulldog Blog, sharing his views on healthcare in America, why it’s so expensive, and how progress can be made.

Bulldog Blog: What does the term "casino healthcare" mean, and how did you come up with it?

Dan Munro: After writing about healthcare for Forbes for five years, some of the stories started to repeat themselves. When I started developing a book, I realized that our system in the U.S. is like a casino in many ways. American healthcare is a big gamble—whenever we have to engage with the healthcare system, we don’t know what the financial outcome will be. The bigger issue for most Americans is that there’s no financial transparency. We often don’t know the cost of a procedure or appointment until we’ve gone through the system. That’s what makes American healthcare comparable to a casino.

BB: Why is American healthcare so expensive?

DM: American healthcare is by far the most expensive healthcare system of the industrialized countries, and that’s largely due to the flawed design of tiered coverage. We tier coverage by age, income, employment, military service, and heritage, and we still wind up with about 12 percent of the population that is uninsured. Almost every other industrialized country only has one tier: universal health coverage, where everyone in the population receives coverage for basic healthcare services. Tiered coverage only exists to support tiered pricing, instead of single pricing like other countries, where everyone pays the same amount for healthcare coverage and services.

DM: All that would really do is show us the price we pay for healthcare. It won’t change the underlying design of tiered coverage. Turning a card over and saying, “Here’s your price,” won’t have any impact on the coverage tier that consumers are in. The larger issue isn’t transparent pricing, it’s the tiered model. Opaque pricing hides variable pricing, but just making that transparent won’t change the design flaw that determines the variable price.

BB: In December, the tax reform bill passed. What does that mean for healthcare in America?

DM: It’s interesting because the first attempt on the legislative side of the new administration was to repeal Obamacare, also known as the Affordable Care Act, and they didn’t succeed with that. So they used the mechanism of a tax cut and made changes to healthcare in the bill. Both ways show that they are keenly intent on repealing elements of Obamacare and trying to return to the healthcare system that existed before the Affordable Care Act was passed.

BB: In your opinion, was the Affordable Care Act beneficial or detrimental?

DM: It was absolutely beneficial. But we have to look at it through the lens of systemic healthcare reform. Systemic healthcare reform is a 50-year process. Here in 2018, we’re about halfway through the process. Obamacare was a key element that recognized the need for healthcare reform, but we definitely are not at the finish line.

BB: In your latest article for Forbes, you make the distinction between "universal health coverage" and "single-payer healthcare." What's the difference between the two?

DM: Universal health coverage is the insurance model that includes all citizens. How that’s paid for is variable and can be either single or multi-payer. This is a critical distinction because single-payer healthcare isn’t the best cultural fit for the U.S. and focusing on the payment model is the wrong priority. As a very wealthy country, we can easily afford any healthcare system we choose to design – except one. The one we have.

BB: Why is it important to have affordable healthcare?

DM: If you go back into the history of systemized healthcare, Germany was among the first to recognize the value of a workforce that is both industrialized and healthy. Currently, if you look at the socialized countries—Nordic countries in particular—their payback for having a healthy, productive workforce is staggering. Last year, Warren Buffet highlighted this distinction when he talked about healthcare spending in relation to GDP. In the U.S., healthcare spending is about 18 percent of our GDP, but in other countries, it tends to be around five to seven percent. It’s a big cost component for employers and the government, and the cost is increasing every year.

DM: We absolutely will. We’re on a trajectory towards universal health coverage—I can’t say whether that will be single- or multi-payer. But it’ll be implemented out of necessity because we can’t sustain the annual increase in spending for healthcare that we’re currently seeing. For economic reasons, we’re going to have to address healthcare at a systemic level, and the way to do that is to stop trying to force the math of tiered coverage to work. We’ve been fighting this coverage math for decades and the only solution is single pricing – which is effectively delivered by universal coverage.

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